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THE STUDY ON CUSTOMER SATISFACTION OF PUBLIC
TRANSPORT IN MELAKA BY USING SERVICE QUALITY
DIMENSIONS:
A CASE STUDY OF PANORAMA MELAKA
ELMA ZULAIKA BINTI AB MANAF
UNIVERSITI TEKNIKAL MALAYSIA MELAKA
SUPERVISOR APPROVAL
‘I hereby declared that I have read this project report and in my opinion, this report is
sufficient in term of scope and quality to be rewarded for Bachelor of Technology
Management (Technology Innovation) with Honours.
Signature :………………………………………………...
Supervisor’s name : DR. MOHD SYAIFUL RIZAL BIN ABDUL HAMID
Date : 26th JUNE 2015
Signature :………………………………………………...
Co-Supervisor’s name : CIK JOHANNA BINTI ABDULLAH JAAFAR
Date : 26th JUNE 2015
THE STUDY ON CUSTOMER SATISFACTION OF PUBLIC TRANSPORT IN MELAKA
BY USING SERVICE QUALITY DIMENSIONS:
A CASE STUDY OF PANORAMA MELAKA
ELMA ZULAIKA BINTI AB MANAF
This Report Is Submitted As A Partial Fulfillment for Bachelor of Technology Management
(Innovation Technology)
FACULTY OF TECHNOLOGY MANAGEMENT AND TECHNOPRENEURSHIP (FPTT)
UNIVERSITI TEKNIKAL MALAYSIA MELAKA
JUNE 2015
i
DECLARATION
I hereby, declared this report entitled “The Study on Customer Satisfaction of Public
Transport in Melaka by Using Service Quality Dimensions: A Case Study of
Panorama Melaka” is the results of my own research except as cited in the
references.
Signature : ……………………………………………….
Author’s Name : ELMA ZULAIKA BINTI AB MANAF
Date : 26th JUNE 2015
ii
DEDICATION
To my beloved father, Ab Manaf Bin Mat Nor and
my beloved mother, Nelly Aryani
iii
ACKNOWLEDGEMENT
Alhamdulillah praise to Allah for the great opportunity He gave me all this while. I
am blessed and thankful for the support and love from my family. Not to forget to Dr
Syaiful Rizal Bin Abd Hamid as a charming and dedicated supervisor, who is never
fail to stand behind me and pushed me forward. Also my thank you is to my mates
and colleagues, whom always there through my ups and downs. On top of that, my
best dedication is to my backbones for years in UTeM, my dearest classmates and
best friends. Thank you to all of them from my deepest heart and with love.
iv
ABSTRAK
Kualti perkhidmatan pengangkutan awam yang baik boleh menyediakan servis yang
kebolehpercayaan untuk membuat pelanggan berasa gembira. Kepuasan pelanggan
dan kualiti perkhidmatan adalah asas kepada peluang yang membantu
meningkatkankan lagi perniagaan and mengaut keuntungan terutamanya dapat
mengekalkan kesetiaan pelanggan. Ianya penting kepada syarikat untuk mengetahui
bagaimana hendak mengukur perspektif pelanggan supaya lebih dapat memahami
pelanggan dan memuaskan hati mereka.tujuan utama kajian ini dijalankan adalah
untuk mengenalpasti tahap kepuasan pengguna terhadap servis yang diberikan
dengan menggunakn dimensi kualiti servis and menyiasat sama ada mereka berpuas
hati dengan servis yang diberikan syarikat pengangkutan awam di Melaka. Selain itu
juga pengkaji mengenalpasti dimensi yang terlibat dalam meningkatkan kepuasan
hati pelanggan terhadap servis yang telah diberikan dengan mengguanakan dimensi
SERVQUAL dan menganalisi dimensi yang paling dapat membantu meningkatkan
kepasan pelanggan. Analisis kuantitatif digunakan untuk mencapai objektif kajian,
beberapa survey akan dilakukan dan kajian ini akan dijalanan di syarikat Panorama
Melaka iaitu satu-satunya syarikat pengankutan bas awam di Melaka. Data yang
diambil adalah sebanyak 100 responden. Kesimpulannya, Panorama Melaka telah
menyediakan servis yang terbaik kepada pelanggan mereka kerana kajian ini dapat
mengukur hubungan antara penyedia perkhidnatan dan pelanggan.
v
ABSTRACT
A good service quality of public transport can provide a reliable service to the
customers for which make them happy. Customer satisfaction and service quality are
one the basic opportunities which help to run, to improve business and profit of the
company especially to save loyalty of its customers. It’s very important for
companies to know how to measure consumer’s perspective in order to better
understand their needs hence satisfy them. The main purpose of this study is to
determine customer satisfaction by using SERVQUAL dimensions and investigate
whether they satisfied with the service offered by public transport in Melaka. Besides
that, the researcher has determined the dimension of the service quality that can be
use in SERVQUAL analysis and analyze which dimensions will enhance the
customer satisfaction of public transport. The quantitative analysis is used to achieve
the objectives. The series of survey that been used in this study is important to
measure the satisfaction of the service that they provide to their customer. The study
was conducted in Panorama Melaka which is the only public bus service in Melaka
and the data was collected for 100 respondents. In addition, five dimensions such as
reliability, responsiveness, assurance, tangible and empathy will be used to
investigate what dimension will enhance the customer satisfaction for the service
provided. As the conclusion, Panorama Melaka has performed a good service
quality through the analysis of the dimension in order to measure the relationship
between the service provide by Panorama Melaka and their customer.
vi
CONTENT
TITLE PAGE
DECLARATION i
DEDICATION ii
AKNOWLEDGEMENT iii
ABSTRAK iv
ABSTRACT v
CONTENT vi
LIST OF TABLES x
LIST OF FIGURES xi
CHAPTER 1 INTRODUCTION
1.1 Introduction 1
1.2 Background of the Study 3
1.3 Research Problem 4
1.4 Research Question 4
1.5 Research Objectives 5
1.6
Scope, Limitation And Key Assumption of
Study
1.7 Significance of the Study 6
1.8 Summary 7
CHAPTER 2 LITERATURE REVIEW
vii
2.1 Introduction 8
2.2 Public Bus Transport 8
2.3 Service Quality 10
2.4 Conceptualization of Service Quality: SERVQUAL 11
2.5 Service Quality Dimension 12
2.5.1 Tangibility 13
2.5.2 Reliability 14
2.5.3 Responsiveness 15
2.5.4 Assurance 15
2.5.5 Empathy 16
2.6 Customer Satisfaction 17
2.7 The Relationship of Service Quality
towards Customer Satisfaction
19
2.8 Theoretical Framework 20
CHAPTER 3 RESEARCH METHODOLOGY
3.1 Introduction 21
3.2 Research Design 21
3.2.1 Explanatory Study 22
3.3 Methodological Choices 23
3.3.1 Quantitative Analysis 24
3.4 Data Collection 25
3.4.1 Primary Data 25
3.4.2 Secondary Data 26
3.5 Location of Research 26
3.6 Research Strategy 27
3.6.1 Survey 28
3.6.2 Hypothesis Development 29
3.7 Time Horizon 30
3.8 Scientific Canon 30
3.8.1 Reliability 30
3.8.2 Construct validity 31
3.8.3 Internal Validity 31
viii
3.8.4 External Validity 32
3.9 Summary 32
CHAPTER 4 DATA ANALYSIS AND RESULT
4.1 Introduction 33
4.2 Reliability Test 34
4.3 Demography Analysis 35
4.3.1 Gender 35
4.3.2 Age 36
4.3.3 Occupation 37
4.3.4 Income 38
4.3.5 Frequency Use Bus
39
4.4 Analysis of Service Quality Dimensions in Enhancing
Customer Satisfaction of Public Transport
40
4.4.1 Dimension of Tangible 41
4.4.2 Dimension of Reliability 42
4.4.3 Dimension of Responsiveness 43
4.4.4 Dimension of Assurance 44
4.4.5 Dimension of Empathy 45
4.5 Best Dimension of Service Quality in Enhancing Customer
Satisfaction of Public Transport
47
4.6 Analysis of Best Dimension in Enhancing Customer
Satisfaction of Public Transport
48
4.7 Hypothesis Testing 50
4.8 Summary 53
CHAPTER 5 DISCUSSION, CONCLUSION AND RECOMMENDATIONS
5.1 Introduction 54
5.2 Discussion of Findings 54
5.3 Dimension of SERVQUAL Affect The Enhancement of
Customer Satisfaction Towards Public Bus Transport.
55
5.3.1 Tangible 56
ix
5.3.2 Reliability 57
5.3.3 Responsiveness 58
5.3.4 Assurance 58
5.3.5 Empathy 59
5.4 Dimension of Empathy as the Best Dimension in Enhancing
Customer Satisfaction of Public Transport in Melaka
61
5.5 Analysis of Empathy Dimension towards Customer
Satisfaction Enhancement of Public Transport in Melaka.
61
5.6 Conclusion 63
5.7 Recommendations 64
REFERENCES 65
APPENDICES 67
x
LIST OF TABLES
TABLE NO TITLE PAGE
2.5 Definition of Customer Satisfaction (Grigoroudis & Siskos, 2010) 18
4.2 Cronbach alpha 35
4.3.2 Age Distribution 36
4.4 Summary of Means and Standard Deviation (N=100) 40
4.5 Correlation between of Public Transport. Service Quality
Dimension and Enhancement of Customer Satisfaction
48
4.6 Empathy Statement 49
4.7 (1) Multiple Linear Regression for all Dimensions 50
4.7.1(2) Beta and p-value for each Dimension 52
xi
LIST OF FIGURES
FIGURE NO. TITLE PAGE
2.3 Service Quality Model 12
2.6 The Theoretical Framework of This
Study
20
3.6.2 The Elements Of Independent And
Dependent Variables
29
4.3.1 Gender 36
4.3.3 Respondents’ Occupation 37
4.3.4 Respondents’ Income 38
4.3.5 Respondents’ Frequent Use the Bus. 39
4.4.1 Dimension of Tangible 41
4.4.2 Dimension of Reliability 43
4.4.3 Dimension of Responsiveness 44
4.4.4 Dimension of Assurance 45
4.4.5 Dimension of Empathy 46
1
CHAPTER ONE
INTRODUCTION
1.1 Introduction
Malaysia’s services sector is continuing to expand and will contribute more to the
economy. Bank Negara showed the service sector had contributes a strong, sustained
6 percent to the country’s second quarter gross domestic product (GDP) figure of 6.4
percent.
Service industry is refers to companies that primarily earn revenue through
providing intangible products and services. Service industry companies are involve
in retail, transport, distribution, food service as well as other service dominated
businesses (Businessdictory,2012).
As the Malaysian economy matures and the nation veers towards becoming a
developed nation, the services sector begins to assume a greater role. This is true of
all developed countries. As such it only stands to reason that this sector becomes the
target for investment, domestic or otherwise. There are 12 sectors classified under
services and each of these sectors has their respective World Trade Organization
(WTO) classification which defines their scope which are business, communication,
construction and related engineering, distribution, education, environment, financial
services, health related and social services , tourism and related travel, recreational
2
cultural and sporting services, transport and others (Ministry of International Trade
and Industry, 2013).
In Malaysia, there is always user consumption of bus service because the public
transport in the country is poorly planned and managed by authorities compared to
others countries like Singapore and Hong Kong in Asia.
The importance of public transport are help to prevent traffic congestion because
traffic congestion is high during peak hours and help the public reduce some burden
with a lower cost of living. Taking public bus as daily transportation can help to
reduce cost of living compared to other public transport such as taxi.
Inadequate of bus service will lead to increased private car dependence and will
impact on extravagance of fuel consumption, environmental devastation, and social
equity issues that will affect the balance of life order (Schipper et al. 2000).
Public transportation has undoubtedly play a vital role in commuting passengers
to work or to places they desire, and more importantly, to reduce traffic congestion
(Kamaruddin R., Osman I. and Che Pei C. A., 2013).
When people are using public bus rather than taking a taxi or a car, they save
some money that is normally used before the public bus provided. That is the private
benefit gained by the public for using the public bus. Air pollution also can be
reducing in the effect of people using more public transport which can improve air
quality in the area and also health of the public.
3
1.2 Background of the Study
Customer satisfaction and service quality are leading component in the system of
external relation of each organization, as today they largely determine its
competitiveness. The desire to manage relationship with customers leads to the fact
that organizations are starting to pay attention to the development and
implementation of service standards. Reviewing standards of customer service as
part of the corporate culture of the organization allows finding more effective
approaches to its development and implementation.
This study is focused on the customer perception towards public transport in
Melaka in order to investigate the performance level of service quality by using
SERVQUAL approach.
Service organization have begun focusing on the customer perception of service
quality because its helps in developing strategies that lead customer satisfaction
(Saravanan and Rao,2007).
The study use the SERVQUAL method developed by Zeithami, Parasuraman
and Berry (1990) to determine the levels of satisfaction and expectation besides
discuss about its attributes and gap, in what contexts has the model been used and the
pros and cons when using this model in measuring service quality. It is the premise
of this study, that understanding the expectation of public transport by consumer that
will improve their satisfaction.
4
1.3 Research Problem
The poor performance of public transport system especially on bus transport
causes this mode become uninteresting as one of transportation mode in the city. The
major issue arises when talk about public transport is their service provide to
customer. Public transport especially bus is very important to Malaysia citizen. They
prefer to choose public transport in order to avoid congestion beside it will reduce
cost and time. Nowadays many complaint and feedback from customer about bus
service. For example accident issue, the attitude of bus driver, hygiene of the bus,
ticketing system and etc.
The main issue that addressing in this research which are service quality and
customer satisfaction using SERVQUAL model in public transport context. The
analysis of the dimensions of the service quality from customer’s perspective through
assessing their expectations and perceptions of service quality is needed. The
dimensions include tangible, reliability, responsiveness, assurance and empathy.
1.4 Research Question
More specifically, the researcher would like to answer the following question in the
study:
1. What are service quality dimensions that enhance customer satisfaction of
public transport in Melaka?
2. What is the best dimension of service quality to enhance customer
satisfaction of public transport in Melaka?
3. How the best dimensions of service quality enhancing the customer
satisfaction of public transport in Melaka?
5
1.5 Research Objectives
Based on the research question, the researcher constructs research objectives;
1. To determine service quality dimensions that enhance customer satisfaction
of public transport in Melaka.
2. To examine the best dimension of service quality to enhance customer
satisfaction of public transport in Melaka.
3. To analyze the best dimensions of service quality enhancing the customer
satisfaction of public transport in Melaka.
.
1.6 Scope, Limitation And Key Assumption of study
This research is to enhance service quality of public transport in Melaka by using
SERVQUAL approach. By using SERVQUAL approaching, the researcher can
identify the dimensions that influence the factor of customer satisfaction towards
public transport service in Melaka.
The limitation is when the researcher having difficulty if there are errors due to
question non response may exist. The number of respondents who choose to respond
to a survey question may be different from those who chose not to respond thus,
creating bias. Respondents also may not feel encouraged to provide accurate and
honest answer. The researcher also want to mention that this research is cannot be
generalize to represent the entire of public transportation in Malaysia because the
researcher decide to make the study in Melaka only. The problems occur for different
company at different place maybe different.
The key assumption that aspect from the researcher are the cooperation and
honest answer from the respondent for the survey will be distribute by the researcher
in order to collect the data. The information that gets from the respondent is very
important to prove the relationship and the hypothesis of the result analysis for this
6
research. The researcher also hope this study can be useful and practically for public
transport industry especially for the company itself.
1.7 Significance of the Study
Government has good initiative for Malaysia to have public transport in order to
improve public transport usage. In Melaka, the state government also shows initiative
to improve public transportation to provide better transportation services to the
public.
The recent announcement about the state government taking over the operation
of the public bus services shows a good move to take public transportation to a
higher level of services (NST Online, 2012).
According to Economic Report 2014 until 2015 that issued by Finance Ministry
today, following this initiative, public transport mode percentage have increased
from 17 percent in 2010 to 21 percent in 2013. Government was targeting public
transport mode percent increase to 25 percentage towards 2105 and 50 percent in
2020.
The main purpose of this study is to investigate the performance level of bus
service in Melaka by using SERVQUAL approach. The researcher also focuses on
customer satisfaction level on Panorama Melaka service quality by using the analysis
of survey.
Customer satisfaction is important because it provides the organization with a
metric that they can use to manage and improve their service. Customer satisfaction
is the best indicator of how likely a customer will make a purchase in the future.
Important to know what scale that customer will allocate base on the service quality
that provided by company.
Current state of Malaysia’s public transport especially public bus is perceived to
be unable to meet citizen’s need satisfactorily. Many claim that if the public
7
transport is being improved, they are willing to use it instead of paying for
outrageous petrol prices and tolls and ending up stuck in traffic jams (Kambala A.N.
et al., 2007).
In a competitive marketplace where business compete for customer, customer
satisfaction also as a key differentiation because they know why they choose one
over the other. McKinsey found that an unhappy customer tells between 9-15 people
about their experience. In fact, 13% of unhappy customers tell over 20 people about
their experience. Many unhappy customers make the complaint on the organization
websites but it not changes the service.
In order to investigate the performance level of public transport in Melaka, the
researcher makes the research on customer satisfaction by using SERVQUAL
approach.
1.8 Summary
In this chapter, the researcher gives the overall point of view of the study. The
research objectives and research question constructed in order to achieve the best
result for the main objectives for the research. Finally, this chapter will also explain
the importance of this study and why researcher wants to examine in this study.
8
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
This chapter comprises of the explanation on importance of public
transportation and also the background of service quality. It also includes the concept
of measuring service quality by using service quality dimensions that has been
utilized one by one in the chapter. Customer satisfaction also will be defined since it
related to the result of service quality and customer satisfaction. Finally the
relationship between service quality dimensions and customer satisfaction of public
transport was recognized. Last but not least, the summary of the chapter is provided.
2.2 Public Bus Transport
Transport is a major component in the system of life, the government system
and social system. The government conducted a public transport means that the
government make policy for the procurement of transport is seen from its technical,
sociological and political such as the procurement of land, spatial and capital.
9
Reliability of transportation as a public service to be reviewed from the
aspect of social justice should be focused on the development of public transport that
is convenient, safe and cheap in order to optimize the accessibility of society. This is
including the development of public transport that is integrated between each other
and with the other modes. Still associated with the development of public transport
as a public service in the transportation sector, have become imperative repairing in
the public transport sector, especially in terms of increasing the quantity and quality
of service (Penalosa, 2005).
As a sector that serves many people, the type of public transport vehicles
must be operated in compliance with the road hierarchy, capacity and transportation
demand that it served. The creation of a reliable public transport as one of the form
of increased public service in the transportation sector and it is believed to decrease
the number of private vehicle use. This will provide benefits in addition to the
company because of reduced congestion, waste fuel and time losses also provide
benefits in terms of public health and the environment. The travelling public has
demand for transport. It is expected to be convenient, efficient, affordable and high
quality.
The car meets some of these demands and will continue to do so but its
impact can lead to a reduction in efficiency and convenience, journeys become
longer and journey time more uncertain and start to erode the beauty and
opportunity that the city has to offered (Penalosa, 2005).
Bus transport is a vehicle that has more than eight seats not including the four
drivers to sit, either with or without baggage transportation equipment. Bus transport
in most parts of the world at this time is not on the desire to encourage good service.
Bus services are often not reliable, not comfortable and dangerous.
Bus service play a major role in the in the provision of public transport. These
services can take many forms, varying in distance covered or types of vehicle used
and can operate with fixed or flexible routes and schedules. Services may be
operated by public or private companies and be provided using bus fleets of various
sizes. Conversely, the transportation plan and public officials sometimes even turn on
the alternative public transport such as city trains.
10
However, there is an alternatives service to the community that does not
cause a high burden on the city (Giannopoulos, 1989).
2.3 Service Quality
Parasuraman et al. (1988) viewed quality as the degree and direction of
discrepancy between customers’ service perception and expectation Cepiel (1990)
defined service quality as customer perception of how well a service meets or
exceeds their expectation through the service that provided. In the other words, the
degree of good service quality can be analyzed by customer expectation and
perception.
Service quality researchers agree that service quality is an exclusive and
abstract concept that is difficult to define and measure because of the intangibility
and inseparability elements. Good service pays dividends in term of customer
loyalty, loyal staff and increase profit. Some believe that customer satisfaction leads
to perceived service quality, while other believes that service quality leads to
customer satisfaction.
Indeed customer who are satisfied become loyal and for customer to be
satisfied, service quality is key (Lovelock and Wirtz, 2004).
According to Cronon, Jr. and Taylor (1992), one plausible explanation is that
satisfaction assists consumers in revising service quality perceptions which are:
1. Consumer perceptions of the service quality of a firm with which he or
she has no prior experience are based on the consumer’s expectations.
2. Subsequent encounters with the firm lead the consumer through the
disconfirmation process and revised perceptions of service quality.
3. Each additional encounter with the firm further revises or reinforces
service quality perceptions.
4. Revised service quality perceptions modify future consumer purchase
intentions towards the firm.